Procurement, the process by which services and goods are obtained from a third party, is crucial to running any organization, but can also involve many interrelated and sometimes tedious facets. Negotiation, analysis, and development of specifications are all important aspects of a procurement contract where a buyer agrees to obtain either services or goods from a seller and receive consideration in return. Such contracts may include business provisions, detailed cost charts, payment information, and any additional legal terms or conditions that are applicable to the agreement. Below, we will discuss some tips and the best practices for obtaining and management procurement contracts.
Procurement Process Background
Prior to entering into a procurement contract, it is standard for a company to issue a project proposal request. These proposals present the issue or need at hand and bidders may respond with an outline detailing their qualifications, objectives, price lists, expected timeline, etc. After the proposals have been reviewed and prove to meet the proposal requirements, a buyer will enter into a procurement contract with the bidder of their choice.
In order to optimize productivity and accuracy in relation to workflows, ordering cycles, records management, and other processes, the right technology needs to be selected. There are many software programs that can greatly optimize the entire procurement process, but care needs to be taken in the selection process. Here are two points to consider when implementing technology to enhance the procurement process:
- Establish your processes before finding your software, and then find software that can fit into and enhance those processes. For a list of the highest rated procurement software see capterra.com.
- Acquiring the right software is only the first step. Just as important is proper implementation. In the beginning stages, keep detailed records of steps taken, and assign an individual or team to know the software inside and out. It is also optimal if your software provider has excellent customer support.
Proposals and Contract Terms
The best way for procurement specialists to initiate a relationship with vendors is to issue a request for proposal (RFP). Proposals which come back from vendors and suppliers serve as a type of contract, and when accepted, they establish that initial relationship. The proposals allow the contractor to understand the program manager’s expectations and goals for the project. By providing a clear understanding of the situation at hand, the proposal enables the contractor or vendor to outline and establish goals for a specific schedule, cost, performance expectations, and benefits to the customer. The most beneficial party to an agreement has the ability to review the request for a proposal and return with a strong proposal that directly addresses the need at hand, offering needed solutions and benefits.
Contract Management Optimization
Procurement specialists who manage hundreds of contracts or more are uniquely positioned to benefit immensely by implementing a digital contract management solution. Using a software program offers key benefits that enhance accuracy, efficiency, and record keeping. Software like Concord’s all-in-one contract platform, helps companies simplify the management of procurement contracts through providing a cloud-based, centralized repository which can be used for live e-negotiations and contract management. The collaborative nature of Concord’s interface allows contractors and customers to engage in the contract process from start to finish. Both buyer and seller have the ability to:
- Standardize processes and procedures.
- Shorten the procurement process and increase visibility on both ends.
- Establish and collaborate on contract terms.
- Share and E-sign documents.
E-negotiation, the process of using internet-based systems to carry out transactions, has made it quicker and easier for parties to collaborate on agreements and reach mutual understanding of expectations forge a profitable relationship.
As a procurement agreement addresses the many conditions and policies involved, Concord’s advanced system makes it easy to implement custom roles and advanced administrative oversight of the contract. Important contract information like cost and timeline can be centrally reviewed within the summary of conditions and agreements. Additionally, notifications of contract and timeline updates can be sent automatically to all parties involved. This helps both the contractors and the customers to adhere to the terms and conditions agreed to in the contract. The intuitive user interface sends alerts to both parties to ensure that financial and service deadlines are met.
Procurement management becomes more interactive and accessible when the process is managed online and the contract lifecycle can be tracked from start to finish. Procurement specialists have the opportunity to optimize and streamline the contractual process by managing their contracts online. Both buyers and sellers can be more efficient in their procurement contracts with safe and successful online software as they develop and maintain their contracts.